Mortgage application volume falls 2.1%

Interest rates rose last week as refinance and purchase volume declined, weekly survey says.

February 13 2008: 8:06 AM EST

WASHINGTON (AP) -- Mortgage application volume fell 2.1 percent during the week ending Feb. 8, according to the trade group Mortgage Bankers Association's weekly application survey.

The MBA's application index fell to 1,063.5 during the week from 1,086.6 the previous week.

Refinance volume fell 3 percent during the week, while purchase volume fell 0.3 percent. Refinance applications accounted for 67.4 percent of all applications.

The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.

An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 1,063.5 means mortgage application activity is 10.635 times higher than it was when the MBA began tracking the data.

The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.

Application volume fell as interest rates moved higher during the week. The average interest rate for traditional, 30-year fixed-rate mortgages rose to 5.72 percent, from 5.61 percent the previous week. The average interest rate for a 15-year fixed-rate mortgage, a popular option for a refinance application, increased to 5.18 percent from 5.09 percent.

The average interest rate for one-year adjustable-rate mortgages increased to 5.72 percent from 5.62 percent the previous week.